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udc 005 52 005 33 005 71 cobiss sr id 220024076 conference paper implications of business and economic environment and strategic management and performance management in selected countries of central ...

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                                                                                                UDC: 005.52:005.33  
                                                                                                                                                             005.71 
                                                                                         COBISS.SR-ID: 220024076 
                CONFERENCE PAPER 
                 
                        Implications of Business and Economic Environment and 
                          Strategic Management and Performance Management in 
                           Selected Countries of Central and Eastern Europe (CEE) 
                                    1
                        Balcar Petr , Taušer Jozef, University of Economics, Faculty of International Relations, 
                                                                                           Prague, Czech Republic 
                 
                 
                 
                    ABSTRACT – This paper  focuses  on  main  characteristics  of  the  recent  development  of  the 
                business  environment,  business  education  and  management  procedures  in  selected  countries  of 
                Central  and  Eastern  Europe  (CEE),  the  Baltic  and  Balkan  countries,  and  emphasizes  important 
                aspects influencing business performance. Our conclusions are based on analyses of 30 international 
                business companies, nonprofit, and public organizations, academic and business sources, and on our 
                personal  hands  on  business  experience.  We  have  observed  differences  especially  in  long-term 
                development  of  entities,  strategic  management,  controlling,  performance  management,  employee 
                appraisal, as well as other areas related to performance management. Due to space limitations we do 
                not include a comparative analyses of procedures based on identical aspects for selected countries but 
                rather emphasize the most important elements.  
                 
                    KEY WORDS: strategic management, process management, performance management, financial 
                management, CEE countries and managerial performance  
                Introduction 
                    The goal of this article is to assess the business environment and governance procedures 
                in  selected  countries  of  Central  and  Eastern  Europe  (CEE),  and  the  Baltic  and  Balkan 
                countries.  The  research  is  based  on  a  sample  of  30  international  business  companies, 
                nonprofit, and public organizations. Key strategic and performance-related issues that help 
                business firms and other organizations cope will be our focus and we will investigate the 
                details  of  managerial  approaches  in  respective  countries  in  order  highlight  both  the 
                weaknesses  and  strengths  within  the  CEE  region.  This  will  provide  the  foundation  for 
                systematic  highlighting  of  the  main  challenges  that  the  region  faces  to  keep  up  with 
                advanced western capitalist economies.   
                    More  specifically,  we  focus  on  strategic  management  and  performance  management 
                characteristics and specific needs for improvement to catch up and compete successfully in 
                the international business arena. This research topic is part of a broader goal for our work. 
                                                                      
                1 University of Economics, Faculty of International Relations, W. Churchill Square 4, 130 67 Prague 3, 
                Czech Republic, balcar.petr86@gmail.com 
        10            Economic Analysis (2015, Vol. 48, No. 3-4, -9-28)
                                                      
        We also include information from on our hands-on experience working with firms, and in-
        depth interviews with their top management. 
         The anticipated outcome of this paper is to develop to the extent to which it is important 
        to  use  effectively  standard  strategic  procedures  and  management  processes  to  achieve 
        a competitive level of performance in production, sales and service provision in international 
        business. Gaining and maintaining a competitive advantage are key conditions of success in 
        current business dynamics. This paper emphasizes key steps for success in selected world 
        regions influencing international business cooperation. 
         From the authors’ experience in working with a wide variety of smaller, especially start 
        up firms; they quite often do not emphasize quality of governance. Both the shareholders 
        and the management primarily focus on core business operations that support a fast launch 
        of products and services into the market. Their primary goal is the growth of output and 
        revenue.  Investments  in  management  systems  and  governance  improvement,  especially 
        supporting improvement of effectiveness and competitiveness have lower priority. We have 
        observed the lack of attention to this goal also among several large international business 
        players.  The  public  sector  especially  has  much  room  for  improvement  of  governance 
        procedures. 
         We also aim to provide general conclusions on the extent to which it is important to 
        improve  governance,  the  managerial  processes  of  organizations  and  professional  core-
        business- related development. Tracking all up-to-date development trends, especially in 
        Information Systems and Information Technology (ISIT), is difficult. In the past two decades 
        many organizations have decided to outsource key processes and activities, including parts 
        of  ISIT  functions.  The  “profile”,  i.  e.  strategically  important  activities,  however,  usually 
        remained with the know-how “owners”, within a core business. Because ISIT has not only an 
        infrastructure supporting function, but it is integral to all company business processes, this 
        paper focuses on how effectively ISIT is used by our sample entities. Finally, we include a 
        full comparative analysis for the most important elements of procedures, based on the same 
        characteristics for selected countries. 
        Worldwide management system trends 
         Business procedures vary substantially in many aspects across geographical areas. These 
        differences  can  be  ascribed  to  specific  fundamental  values,  cultural  traditions,  working 
        habits, and by economic and overall level of progress.  One would expect, however, that 
        governance of companies and institutions worldwide should be rather similar in principle.    
         Nevertheless, differences in governance internationally occur not only among various 
        industries but also within the same sector. Such differences also exist within geographically 
        and culturally similar regions. In general, there is almost never only one best management 
        solution, especially in a combination with an ISIT solution. It is always important to consider 
        “Best Practices” experience relevant to the nature, size and other specifics of an organization 
        in question. For doing business internationally it is crucial to align optimally Best Practices 
        within  a  particular  sector,  with  circumstances  of  the  respective  geopolitical  region, 
        expectations and preferences of shareholders and thus the management. 
                                       Balcar, P., et al., Selected Countries of CEE, EA (2015, Vol. 48, No. 3-4, 9-28)              11 
                       High quality governance is closely linked with core business competences. It is the key 
                   precondition  for  a  long  term  conceptual  strategic  approach  to  the  organization’s 
                   development. Business process areas are usually grouped as outlined below with selected 
                   typical processes falling into these groups: 
                           •    Management processes as primarily strategic management, risk management, research 
                                and development, legal services, process and organization structure maintenance, internal 
                                audit, PR and communications;  
                           •    Core processes as the ones that represent the primary specialization of an organization; 
                                and  
                           •    Infrastructural processes as finance, ISIT (penetrating into all company processes), human 
                                resources, security and safety. 
                       Company processes need to be aligned and effectively managed in a coordinated way 
                   throughout the entire value chain. It is crucial primarily to use available theoretical sources 
                   on  management,  ideally  in  relevant  sectors,  to  set  a rational  balance  in  designing  and 
                   executing all processes that are supporting achieving and keeping a company’s competitive 
                   advantage. 
                       Another important step is to analyze the degree of success in implementing the theory 
                   into practice, i. e. an ability to suggest and adopt, based on an up to date theory, steps 
                   towards entity’s performance improvement. We need gradually to analyze results, consider 
                   needs  for  ongoing  corrections  and  take  actions  towards  strategy  improvements.  It  is 
                   necessary  to  utilize  effectively  a potential  for  implementation  of  new  information.  An 
                   anticipated outcome of this task would be to balance the status among learning new skills, 
                   speed of their implementation, quality of work and the final organization’s outcome. 
                       Unlike as claimed in former communist countries we do not recognize two separate types 
                   of economic theories and thus business categories, domestic versus international. There is 
                   only  one  “business  world”,  even  if  operations  are  not  international.  Due  to  a  gradual 
                   opening of many economies towards international trade of goods, services, information, 
                   knowledge, science and values we only need to consider specifics of various geopolitical 
                   regions. 
                       An  impact  of  international  aspects  of  doing  business  on  the  importance  of  using 
                   a strategic approach and, consequently, structured financial and performance management 
                   in international business, is another focus of this article. 
                   Analysis of current situation – key issues  
                       This analysis includes the managerial environment of companies operating in various 
                   countries,  in  connection  with  their  existing  local  political,  economic,  and  business 
                   environment.  The  sample  entities  operate  both  domestically  internationally.  The  key 
                   research  areas  are  strategic  management  and  performance  management,  and  their 
                   connection to financial management and controlling. 
                       An initial analysis will be a starting point for stating hypotheses and a consequent testing 
                   in a dissertation that will follow. The main theoretical bases used for the analyses portion are 
                   standard  frameworks  and  procedures  of  strategic  management  such  as  Strategic 
                   Management Framework by Fred David (2013): 
        12            Economic Analysis (2015, Vol. 48, No. 3-4, -9-28)
                                                      
                 Diagram 1. A Comprehensive Strategic-Management Model 
                                                      
        Source: David (2013), p. 47 
          
         The above Strategic-Management Model outlines particular phases and components of 
        strategic  management,  which  can  be  linked  to  a  controlling  framework,  comprehensive 
        performance management framework models such as the Balanced Scorecard, to modern 
        financial management concepts such as CFO Framework, and to other current governance 
        practices. Due to its logical structure this comprehensive strategic model is compatible with 
        process based management approaches and can be used in a process based organization. 
         The  following  scheme  shows  how  a  Balanced  Scorecard  performance  management 
        framework that includes evaluation and feedback is linked with a strategy. 
         
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...Udc cobiss sr id conference paper implications of business and economic environment strategic management performance in selected countries central eastern europe cee balcar petr tauser jozef university economics faculty international relations prague czech republic abstract this focuses on main characteristics the recent development education procedures baltic balkan emphasizes important aspects influencing our conclusions are based analyses companies nonprofit public organizations academic sources personal hands experience we have observed differences especially long term entities controlling employee appraisal as well other areas related to due space limitations do not include a comparative identical for but rather emphasize most elements key words process financial managerial introduction goal article is assess governance research sample issues that help firms cope will be focus investigate details approaches respective order highlight both weaknesses strengths within region provide...

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